We study how enhancers activate transcription in the chromatin environment of eukaryotic cells. To study the interaction of globin genes and elements of the beta-globin locus control region (LCR), we have used chromatinized, stably replicating episomes in human erythroid K562 cells. Double label FISH confirms the maintenance of 10-15 episomes per cell. The episomes, as expected, associate with the cellular chromosomes, providing a means to achieve equivalent segregation at cell division. Mutagenesis studies which systematically eliminated transcription factor binding sites in LCR HS2 and in the embryonic epsilon-globin promoter, revealed that enhancer and promoter mutually affect each others chromatin structure. Studies with the beta-globin gene, and with LCR HS3 and HS4 provide additional support for this concept. These data are most consistent with a direct communication model of enhancer action. Current studies in vitro with purified transcription factors address their role in this communication. To further understand enhancer dependent promoter remodeling, we examined nucleoprotein composition and histone acetylation at transcriptionally active and inactive promoters. There was a marked decrease in nucleoprotein complexes recovered from the promoter/TATA nucleosome of actively transcribing versus inactive epsilon-globin genes, and the underlying DNA was of sub-nucleosomal size. ChIPs assays revealed dramatic hyperacetylation of histone H3 and H4 at this nucleosome in active promoters, while the adjacent upstream nucleosome was not differentially acetylated. Global acetylation of histones in vivo by Trichostatin A, did not mimic this highly directed and specific nucleosome alteration suggesting that additional activities of HS2 are necessary. We continue to explore the regulatory role in vivo of chromatin structure in the expression of globin genes, and the mechanism of action of the beta-globin LCR.